AI Takeaway
EQR reported a sharp 64.9% YoY decline in net income to $90.1M in Q1 FY2026, primarily driven by lower gains on property dispositions compared to the prior year period, while operating cash flow remained solid at $400.5M.
EPS (Basic)
$0.24
-64.71% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Net income fell sharply to $90.1M from $256.6M in Q1 FY2025, a 64.9% YoY drop. This decline is largely attributable to significantly lower gains on property sales in the current period compared to the prior year, which is typical for REIT earnings volatility.
Source: Source: 10-Q Income Statement
Despite the net income decline, operating cash flow came in at $400.5M, down only 5.9% YoY from $425.5M, indicating that core rental operations continue to generate strong and stable cash flows.
Source: Source: 10-Q Cash Flow Statement
EQR repurchased $219.4M in shares during Q1 FY2026, reflecting management's confidence in the stock's value. Financing cash outflows narrowed to -$328.1M from -$541.5M in the prior year, a 39.4% improvement, suggesting reduced debt repayment or distribution activity.
Source: Source: 10-Q Cash Flow Statement
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Upgrade to unlockEQR's GAAP net income is highly sensitive to the timing and volume of property sales, which can create large swings in reported earnings. The 64.9% YoY net income decline in Q1 FY2026 illustrates how the absence of disposition gains can dramatically reduce reported profitability even when core operations are stable. Investors relying solely on GAAP net income may misread underlying business performance.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $0.24 versus the $0.32 analyst consensus — a -25.7% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Net Income | $90.08M | $256.59M | -64.89% |
EPS (Basic) | $0.24 | $0.68 | -64.71% |
EPS (Diluted) | $0.24 | $0.67 | -64.18% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $20.52B | $20.56B | -0.22% |
Total Liabilities | $9.5B | $8.97B | +5.82% |
Stockholders' Equity | $10.67B | $11.05B | -3.41% |
Cash & Equivalents | $34.68M | $39.85M | -12.98% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $400.51M | $425.52M | -5.88% |
Investing Cash Flow | $-92.16M | $97.34M | -194.67% |
Financing Cash Flow | $-328.11M | $-541.49M | +39.41% |
Share Buybacks | $219.38M | — | — |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
ROE | 0.8% | — | — |
ROA | 0.4% | — | — |
Debt to Equity | $0.89 | — | — |
Other companies in Multi-Family Residential REITs
EQR's net income fell 64.9% YoY to $90.1M in Q1 FY2026, primarily because the prior year period included significantly larger gains from property dispositions that did not recur this quarter. This is a common pattern for REITs, where GAAP earnings can be volatile based on the timing of asset sales; core operating cash flow declined by a much smaller 5.9% to $400.5M.
The headline story is a sharp 64.9% drop in net income to $90.1M driven by lower property sale gains, but operating cash flow remained solid at $400.5M, suggesting the core rental business is stable. EQR also repurchased $219.4M in shares and saw total liabilities rise 5.8% YoY to $9.50B, reflecting increased leverage.
EQR maintains a large asset base of $20.5B and generates strong operating cash flow of $400.5M per quarter, which supports its dividend and capital allocation strategy. However, cash on hand is very low at $34.7M and total liabilities rose to $9.50B, so the company depends on credit facilities and continued strong rental income to maintain financial flexibility.
EQR repurchased $219.4M worth of shares in Q1 FY2026, representing a significant capital allocation decision. This buyback activity contributed to the decline in stockholders' equity, which fell 3.4% YoY to $10.67B.
EQR's total liabilities stood at $9.50B as of Q1 FY2026, up 5.8% from $8.97B a year earlier, resulting in a debt-to-equity ratio of approximately 0.89x. While this is a moderate leverage level for a large residential REIT, the rising trend in liabilities alongside declining equity is worth monitoring given the current interest rate environment.